Posts Tagged budgeting

How To Start Homesteading On A Budget

Ever since I was a very young kid, I knew that I wanted to have a little place of my own, to own land were I could enjoy being outside.  That never feeling never left through the years.  So starting a homestead, finding a place for your tiny house or just a little piece to call your own can seem really challenging at times.

how to start a homestead on a budget

For some they just want to start homesteading right where they are, it’s just a matter of figuring out how to do it. For others is just finding the time to make it happen.

So what are we supposed to do when we’re on a budget and all we want to do is start building a life for ourselves?

Get Clear On Your Goals

writing in notebookThe biggest mistake I see people make is they haven’t really defined what they want to do in 1 year, 5 years and so on.  When you get very clear on what you want, you can quickly determine what you actually need in your future stead and where you are going.  Too often people don’t set goals which means they are getting pulled in a million directions.

If you actually write out your goals you gain clarity and you will have a standard to evaluate how you spend your time and resources.  When you have clear goals you can ask yourself “does this get me closer to my goals?”   If the answer is yes, then you should pursue it.  If the answer is no or maybe, then you should say no to whatever it is.

Having goals means you don’t waste money on things that you don’t need and focus the money you do have on hand to the things that will actually let you do what you want to do.  Too often people spend money on things they think they want, but haven’t taken the time to determine if that’s right for them.

Simplify Your Life

Closely tied with my last point, work to actively encourage things in your life that are aligned with your goals, then reject everything else.  This can be difficult, but with some practice and keeping your eye on the prize you can cut out all the stuff that doesn’t matter.

simplify your life quote

From there look at ways to make every day easier and less complicated.  Declutter your home, regain control over your calendar, cut out unnecessary expenses and focus on what matters to you.  This is a long process, but as you bring the important things into focus and remove the things that eat up your time that don’t matter, you’ll find you have more time, less stress, and life seems to flow better.

Take The Long Road

It can be tempting to make the leap now, but if we accept that this is a journey and we need to sort things in our life before we get to our destination.  We realize that we’re putting in the hard work to make our dream possible so that when we do arrive, we are able to really enjoy it fully.  If we rush through it we’ll start homesteading stressed, in debt, and being pulled in a million directions.

take the road less traveledSome of the biggest goals I’ve achieved were only enjoyed because I worked on everything as I made my way there.  When I moved into my tiny house I wanted to have a simpler life, less clutter from possessions, on my way to being debt free and in a really good place in my life and career. If I hadn’t worked to make those things a reality, the experience of going tiny would have been very stressful.

The other thing to know is that a lot of what you want to do requires a lot of new knowledge and experience, which you can start gathering now!  Choose the areas you want to focus on first (goal setting) and find a way to learn more about those areas.  It could be checking a book out of the library, it could be making friends with a local farmer or homesteader and asking if you can help out for free.

A lot of what I learned was from a farmer who I helped weed beds.  As we moved along his raised beds, I would ask lots of questions and we’d talk about various things on his farm that I wanted to know more about.  It was a big help to him, I learned a lot and it filled the time while we were weeding.

Starting Your Homestead Where You Are

For many people when they get really clear on their goals and realize that the whole thing is a journey, they realize that the land they are on is actually a really good place to start for them for where they are in their journey.  Most of us just starting out don’t have many of the skills needed to run a full fledged homestead, so starting small is perfect because we can build our skills so we can later apply them to a larger piece of land.

gardening in your back yard

Start with baby steps as you build out your homestead and if you don’t own the land, consider how you can develop the land in ways that you can take them with you when you upgrade or move.  Portable infrastructure is key when you don’t own your land or the land you’re on is a stepping stone to your final destination.  Things like water systems, shelters for animals, fencing, and even garden beds all can be made to move if need be.

So look around where you are right now, could you start a raised bed?  What about container gardening?  Is there a way you could buy two chickens and learn the ins an outs of raising them?  Be open to possibilities and bring creativity to your situation.

Buying Land With Little Or No Money

For many of us it’s all about finding some land we can call our own.  Land can be very expensive and while we want to grow things, money isn’t one thing we can grow in our gardens.  So how can we buy land without much money?

Rent To Own

rent to own signMost of us are paying something right now for wherever we are living.  It could be rent or a mortgage, but whatever the case is, we actually do have money, it’s just not allocated in the right direction.   What if we were to find some land where we could start renting now and the rent goes towards ownership?

There are many landlords that will consider this, especially when they’ve been trying to sell it for a long time or it’s bare land.  This is sometimes referred to as “owners financing”.  The beauty of this is we often can get in on a property that has potential, but requires some elbow grease for very little down.  Sometimes you can start with nothing down.

If you play your cards right, you can find a piece of land that’s right for you at the same cost of your old mortgage or monthly rent.  If you were spending $500 a month, work the deal to pay the owner $500 a month.  The downsides to this approach are that the owner will often use a higher interest rate than normal and if you default on the payments, you lose it all.  So make sure you have money saved for a rainy day.

Get A Land Loan

Land loans are harder to come by these days, but there are a few credit unions and smaller banks that will still do them.  You’re typically looking at about 2% more interest than going mortgage rates.  This was an option I explored and was able to find financing options through the Farmers Credit Union which had USDA backing.

I don’t typically advocate taking on debt, but there are sometimes that it is the only realistic option.  Houses, land and for some cars are the only way they could achieve this.  If you go this route, make sure you have a good handle on your finances, you’ve paid down all your debt and you have 3-6 months of expenses saved in case of job loss.  This isn’t something you want to mess around with.

Stretch The Money You Do Have

One thing to consider is that land is often expensive, but if we are willing to make a move we can consider areas that land is cheaper.  If you have $15,000 in California, you’re not going to find any options, but if you were open to Montana, you might find some really good deals.  Combined this with a rent to own arrangement and you can get some really nice land for what you have on hand.

The two caveats with this is to make sure that you can still find employment in those areas, if you can remote work you can be pulling in big city pay checks while having small town bills.  The other thing is to try it before you buy it, just because it’s the right price may not mean it’s a place you like to live.

So consider renting for a year and use the time to get to know the area, the people and the lifestyle.  You can use this time to get a lay of the land, understand where you might want to live better and build connections that could help you on your journey.

Rent Land

In more rural locations, especially those where farming is common, renting land by the year is very common.  Many people will use this as a way to expand their farm without buying expensive property.  In some places $50 per acre per year is quite common, you just need to make sure that you are able to move everything if the situation changes.

So those are some of the options you can consider when trying to find land.  It isn’t easy, but with some creativity, hard work and perseverance you can make owning land a reality.

Your Turn!

  • How have you figured out a way to find your own land?
  • Where are you at with your journey?

What to do if you go Overboard and Over Budget

It happens, even to those of us who have been budgeting for years. There are going to be those months where something (or many things) come up and blow your well-planned budget out of the water.

Knowing that it will eventually happen, it is best to prepare yourself for that month (or months) where things have gone overboard and over budget.

Step One: Stop and Breathe – It’s going to be OK

What you want to avoid doing when you know you’ve gone over budget is to throw your hands up in the air and forget the whole budgeting thing. When times get tough and the cash flow feels tight, you want to try your best to maintain a positive attitude.

Step Two: Go Into Your Budget

When I’m stressed out about the budget, the last thing I want to do is go in and check in with my budget since I know I’ve blown it. I know though that it is the one thing that I must do. Go into the budget, see where things are, and see what needs to be cut back on so that you can find a way to cash flow this latest life expense.budget binder

Take a look at your variable spending categories (food, clothing, gas, etc.) and see if there are any areas where you don’t need to spend as much. Can some of that money be used to help cover the unexpected expense?

If you can’t cut from your variable expenses, take a look at what you are setting aside in your sinking funds. Ask yourself if there are any sinking funds that you can stop contributing to this month so that you can free up extra money and not completely blow the budget.

Step Three: Take a Look Around Your House

Is there anything around your house that you could sell to recoup some fast cash to then cover the unexpected? With so many buy and sell sites available online, making some fast cash is never easier and having that cash in hand in exchange for those items that rarely get used anymore will help to limit the stress that you’re feeling right now.

Step Four: Tap into your Savings

If the extra income isn’t there or if there are no areas in the budget left to slash, then it’s time to look at your savings. Yes that money might be earmarked for something else, but if it means not having to go into debt to help cover the cost, it’s better to borrow the money from yourself..

When things are better and you averted this temporary crisis, you can always pay yourself back. And it’s much better to pay yourself back than paying back a bank who charges you interest.

Your Turn!

  • How do you get through those months where life has thrown you an unexpected expense?

5 Things I Stopped Buying to Save Money

When you’re trying to save money, it’s a good idea to track what you currently spend money on and see if there are habits that you can change. Perhaps you can do without some items, look for a cheaper alternative, or find a way of doing it yourself.

In order to free up as much money to put towards our financial goals as possible, we saw our biggest money wasters and made cuts or found cheaper alternatives. They were simple changes to make and we haven’t looked back since.

Pre-Packaged Foods and Snacks

This was one of the first things to get cut from our shopping list that has saved us a lot of money over the last three years. When I saw that I could buy a bag of chocolate chips for the same price as a box of pre-packaged cookies, I quickly realized that I could make a lot more cookies for the same price, cut down on the amount of package waste our family was producing, and save a lot of money in the long-run.

The other things we stopped buying were the pre-packed side dishes, like flavored rice and pasta. Again, a large bag of rice or pasta is much cheaper and you can season it as you wish. The other thing to go were the boxes of crackers. Instead we’ll air pop some popcorn and have that as a crunchy snack.

Bread

One road trip during the summer we found ourselves driving through Amish country. That time of year, you can find vendors set up along the side of the road selling fresh produce and baked goods. When I saw the homemade bread, I had an awakening of sorts.

Bread where I live will go on sale for $1.75 a loaf, and that is the rock-bottom price. At the time I was spending on average $2.00 a loaf and each week and would have to buy 4 loaves of bread (Yes, we’re big bread eaters…Yum). The math however on that was a little scary. $8.00 per week meant that we were spending $416 a year on bread.

We inherited a bread maker that sat in my pantry for years, never being used until we returned home from that summer trip. I found a great recipe and have been enjoying homemade bread ever since. I can easily make a loaf for under $1.00, saving my family $200 a year.

Gym Memberships

When making cuts to our budget to save money, this was also one of the first things to go. I enjoy exercise and know how important it is to our overall health, but I also know that exercise doesn’t have to cost you a lot of money.

Rather than spending $30 a month on a gym membership (that honestly wasn’t being used enough to justify the cost), I spent $30 on a pair of hand-held weights, a weighted medicine ball, and a yoga mat. Getting outside and going for a walk or run is free and, thanks to the internet, there is an endless supply of exercise videos and tutorials available online that I can stream on my television.

Books and Magazine Subscriptions

I used to love getting the mail and finding my magazine subscription come in. When I added up what I was spending each year, I realized that it was money that I could just as easily put towards our financial goals. I quickly cancelled my magazine subscription and started enjoying the same magazine loaned from the library for free.

As a literacy teacher, I also love books. One of my favorite things to do would be to head over to my local bookstore and browse the shelves looking for the next great read. I treasured my growing collection of novels. What I didn’t treasure was the ever increasing price. Again, back to the library to pick up the same books and enjoy them for free. 

Take-Out Coffee and Disposable K-Cups

Coffee. I love coffee. It’s the first thing that I look forward too each and every morning. It was also a constant leak in our budget. When I saw what six months worth of take out coffee cost, I was shocked. It never seems that much when you’re spending only two or three dollars at a time. For what I was spending in one week, I was able to pick up a travel coffee mug and now bring my own from home.

The other expense we gave up were the individual, single-use K-cups for our coffee machine. I traded in my single-use cups and bought some reusable cups that we fill with our own coffee for pennies a cup. Not only is it better for our wallet, but also better for the environment.

Your Turn!

  • What have you stopped buying in order to save money?

6 Things We Gave Up to Get Out Of Debt

In order to get our consumer debt paid off, my husband and I had to be willing to give up some things. We had to consider what aspects of our spending behavior we needed to change so that we could hit our goal as quickly as possible.

Here are the six things that we decided to give up in order to help us pay off our debt:

“Browsing” at our favorite stores:

The more time I spent browsing, the more I realized that there were items out there that I didn’t even know I “needed” and ended up buying. When I did our spending analysis at the beginning of our debt journey, what I found were my weaknesses for Target and the drugstore. That’s where I tended to get into the most amount of trouble when it came to spending impulsively.

I quickly realized that if we were going to get out of debt, browsing in those stores wasn’t something that I could be doing any more as too much money was getting wasted on items I didn’t need.

Shopping without a list:

Whenever I shopped without a list, my focus was easily diverted to all of the other things that I might “need”. In order to cut back on the amount we were spending, we learned that we needed to not only shop with a list, but stick to the list.

Shopping with a list included more than just groceries. When we need clothing, or anything else for that matter, I’ll do an inventory of what we have and then come up with a list of what we need so that when we go into the store we are not as easily distracted and wasting money on items that we don’t need right now.

New clothes:

Instead of shopping at the regular retail outlets, we now shop for new-to-us clothes at the thrift store. In doing so we have saved a lot of money, cutting our clothing budget in half. In order to save even more money, my favorite day to shop at the local thrift store is on their 50% off day.

Convenience food:

One of the biggest ways we saved on our grocery budget was to give up many of those convenience foods that are pre-made or pre-packaged. Many of these processed or pre-made foods tend to be overpriced and you can do it yourself for a lot cheaper. We make our own bread, pancake mix, hot cocoa mix, side dishes, and pizza. Not only is it just and easy to make these things, it’s also comforting to know exactly what’s in it.

Free time:

In order to get our debt paid off, we were also willing to give up some of our free time to generate an extra income, giving us more money to throw into our debt snowball. Both my husband and I have our respective “side hustles” that allow us to use our talents or interests to earn even more money.

Living life without a budget:

budget money

Living on a budget focused our spending and allowed us to gain control of our money. Having a plan for our money allowed us to see how much we needed to live and get by and then how much money was left that we could throw at our debt. Once we got on a written monthly budget, we truly felt as if we had gotten a raise because we were now telling our money where to go instead of wondering at the end of the month, where it went.

Your Turn!

  • What are you willing to give up to get out of debt?

 

Budgeting Mistakes to Avoid

Whether you’re new to budgeting or have been budgeting for a while, there always seems to be expenses that get forgotten or overlooked. I know I’m guilty of overlooking all of the five most commonly forgotten expenses at one point or another. Unfortunately I don’t realize it until the expense comes up and I feel the pinch on our monthly cash flow.

In order to avoid the pinch, it’s a good idea to check your budget and make sure that you haven’t overlooked the most common budget expenses that get forgotten. You don’t want these sneaky budget busters ruining your month.

Special Occasion Gifts:

When looking at next month’s budget you do not want to forget any special occasions (think Halloween) or gifts that you might need to budget for. Open up your social calendar and see if you have any birthdays coming up or anniversaries that are being celebrated. Don’t make the same mistake I seem to do in October, and forget to budget a dinner out for our anniversary, and then have to make cuts elsewhere in the budget to accommodate for the “unexpected” expense.

Car Maintenance:

This is one of those categories that my husband and I overlooked early on in the budgeting process, but one that is important, especially when it’s time for any regular car maintenance. Even if you just set aside a small amount every month in an envelope or sinking fund and let it build, when you have to do an oil change or you have to replace your tires, you’ll have the money ready to go.

House Maintenance:

You also want to make sure that you’re setting aside a little bit of money each month for home maintenance. Even though you may not need this money each month, home maintenance is ongoing. There are always items around your home that will need to eventually be replaced or upgraded. Setting aside some money each month ensures that any foreseeable home repairs don’t require you to dip into your emergency savings or go into debt to cover the costs.

Quarterly or Annual Bills:

You also don’t want to forget those bills that don’t come in every month. For us, our electric bill comes in every other month and we pay our water bill quarterly. You want to familiarize yourself with the bill schedule so that you know which months you need to budget for them. Other quarterly or annual expenses might also include your insurance, licence plate renewal, or any yearly membership renewal fees.

Setting Aside Money for Taxes:

For those that are self employed or generating a side income where income tax is not deducted, you want to make sure that you’re setting aside a certain percentage of that money to keep the IRS happy come tax time. In order to know how much to set aside, you’ll need to determine your marginal tax bracket rate. By setting this money aside and being prepared, you’ll avoid the scramble with the tax bill comes in.

Your Turn!

  • What are some expenses that have busted your budget in the past?
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